Ins & Outs of Developing a Marketing Plan | DCSBDC | Doing Business in DC

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  • 4Ps – Product, Pricing Promotion, PlaceIdentifying Customer needs/problems that can be solvedDeveloping products/service to meet those needsPricing StrategiesPromotions Location
  • How many people believe that a good product sells itself?Saves money & time!
  • Whether the product already exists, major competitors, market needs, trends and size
  • Give examplesMarket segmentation – gov’t, non-profits, and small businesses
  • B2B – Demographics, Geography, Psychographics, Behavior, target market size & needs; Give examples
  • What is the primary reason for segmenting the market? If you will need to market to each group differently.
  • Budget & Mix, 3Ms
  • Don’t confuse your target market with mixed messages
  • Customers are most important – they drive sales
  • Measurement - asking customers, website analytics, surveys, promotions codes, not doing all marketing activities at once
  • Ins & Outs of Developing a Marketing Plan | DCSBDC | Doing Business in DC

    1. 1. The Ins & Outs ofDeveloping An Effective Marketing Plan Presented by Niambi Jarvis Funded in part through a cooperative agreement with the U.S. Small Business Administration
    2. 2. What is Marketing?  The area of business that involves: • The determination of customer needs/problems • The development and offering of tailored services and/or products that have been developed to meet those needs • Capturing customers’ perceived value of product/service through optimal pricing strategies • The development and implementation of the promotional activities that are most likely to reach a business’ target market and stimulate purchase • Identifying the ideal point of contact for customers to access a business’ products and services
    3. 3. What is a marketing plan & why should I have one? A marketing plan is a business tool that outlines how a company will attract, acquire and retain its target market(s) An executable & effective marketing plan: • Identifies the best customer profile (i.e. those individuals who are most willing and able to purchase your products) • Identifies a business’ optimal niche market (area of specialization) • Links sales and profit goals to marketing efforts • Provides an action plan for accomplishing sales and marketing goals (e.g. brand awareness, increase in market share, product line extensions etc.) • Can substantially increase sales & company value
    4. 4. Common Marketing Myths1. Everyone is our customer2. Our products are so good, they sell themselves3. Price is everything4. All buyers are rational5. We have no competition6. Just make more sales calls7. Good fences make good neighbors8. Business is complex; therefore solutions are never easy9. The future is out of our control10. Follow the leader
    5. 5. Before you start… Conduct research • Product/Service • Industry size ($) & projections • Industry trends • Major players/competitors • Market share • Target market characteristics, size, willingness & ability to pay Research sources: • Primary research – surveys, interviews, focus groups, suggestion cards, competitive assessment etc. • Secondary research – DC SBDC, U.S. Census Bureau, www.fintel.us, bls.gov, Edgar, Third Wave research, IBIS World, Public Libraries etc.
    6. 6. Marketing Plan SnapshotI. Executive SummaryII. Situation Analysis • Industry Analysis • Company Analysis • Customer Analysis • Competitor Analysis • Collaborators • Keys to SuccessIII. Marketing Strategy • Marketing Objectives • Financial Objectives • Target Market • Market Segmentation • Positioning Strategy • Marketing MixIV. Financials • Break-even Analysis • Sales Forecast • Marketing Expense ForecastV. Controls • Implementation Milestones • Marketing Organization • Contingency Planning
    7. 7. I. Executive SummaryThe Executive Summary should be written LAST, andcomprise a high level synopsis of: Company History Mission Statement Marketing Objectives Industry Trends Target Market Target Market Need(s)/Challenges Solutions – Your Products and/or Services Financial Feasibility (historical sales (if existing) and projections)
    8. 8. II. Situation Analysis Industry Analysis • Historical & projected industry sales (growth or decline) • Industry trends (e.g. market segmentation, new products, markets etc.) • Political/Legal, economic, social and technological environment Company Analysis • Company products/services • Company history & customers • SWOT analysis
    9. 9. II. Situation Analysis Customer Analysis • Target market description & needs • Target market size, trends and growth • Value drivers Competitor Analysis • Major players (include market share %) • Market position • Strengths & weaknesses Collaborators • Subsidiaries, joint ventures, strategic alliances etc. Keys to Success • e.g. Location, effective networking, effective branding, increased top of mind awareness, consistent customer follow up & feedback, customized services/products, supplier relationships etc.
    10. 10. III. Marketing Strategy Growth Strategies
    11. 11. III. Marketing Strategy Marketing Objectives (2012) • Increase brand awareness • Increase market share by 10% • Launch two new products • Achieve an average customer satisfaction rating of 8 out of 10 • Increase customer retention by 10% Financial Objectives (2012) • Generate $500,000 in annual sales • Increase profit margin from 10% to 15%
    12. 12. III. Marketing Strategy Target Market  Business to Consumer (B2C) • Demographics (age, gender, income, education, generation) • Geography (region, state, population size, density) • Psychographics (activities, interests, opinions, attitudes, values) • Behavior (usage patterns, frequency of use, benefits sought, brand loyalty) • Target Market Size & Needs  Business to Business (B2B) • Business/Organization Type, Revenue/Budget, Location, Number of Employees, Types of Services/Products Purchased, Frequency of Use • Target Market Size & Needs
    13. 13. III. Marketing Strategy Market segmentation – involves dividing the market into groups of individual sub-markets with different needs, wants and behavior.Each segment must be:Identifiable: the differentiating attributes of the segments must bemeasurable so that they can be identified.Accessible: the segments must be reachable through communication anddistribution channels.Substantial: the segments should be sufficiently large to justify theresources required to target them.Unique: to justify separate offerings, the segments must responddifferently to the different marketing mixes.Durable: the segments should be relatively stable to minimize the cost offrequent changes.
    14. 14. III. Marketing Strategy Positioning Strategy – this involves creating an image or identity in the minds of your target market (Unique Selling Proposition (USP)). What are the first things that come to mind when you think of the following brands?
    15. 15. III. Marketing Strategy Perceptual Map High QualityLow HighPrice Price Low Quality
    16. 16. III. Marketing Strategy Marketing Mix – The 4P’s Product/Service • Product Portfolio • Features & Benefits • Product Manufacture/Acquisition • Packaging • Unique value proposition – what sets my products/services apart from my competition?
    17. 17. III. Marketing Strategy Marketing Mix – The 4P’s continued Price • Price listing • Discounts, payment terms, bundling etc. • Cost factors and mark-up • Pricing Strategy & logic (penetration, skimming, competitive value-based)  Penetration - Setting the price low in order to attract customers and gain market share; the price will be raised later once this market share is gained  Skimming - Selling a product at a high price, sacrificing high sales to gain a high profit, therefore ‘skimming’ the market; usually employed to reimburse the cost of investment of the original research into the product (commonly used in electronic markets)  Competitive Pricing - Setting the price based upon prices of similar competitor products  Value-Based Pricing - Pricing a product based on the perceived value and not on any other factor
    18. 18. III. Marketing Strategy Marketing Mix – The 4P’s continued Promotions • Determine Promotional Budget & Mix based on marketing objectives • Determine 3 Ms - Message, Media and Measurement Promotional Mix
    19. 19. III. Marketing StrategyRemember – Connect marketing objectives topromotional strategyAdvertising - build general awareness/inquiries/traffic, encourageproduct trial, shift awareness (e.g. change attitude), response tocompetitor promotion, increase use or purchase rate, support othermarket decisions (e.g. support sales force), general corporate/productimage building, etc.Sales promotion - build inquires, increase product trial, encouragerepurchase, build traffic, support other promotionsPersonal selling - new account development, accountsupport/maintenance, increase product trial, encouragepurchase/repurchase, build traffic, support other promotionsPublic relations - build general awareness/inquiries/traffic, encourageproduct trial, shift awareness (e.g., change attitude), respond to negativenews/perception, image building, prepare markets for future activity (e.g.new product)
    20. 20. III. Marketing StrategyConcepts to remember when developing promotional strategies: • Integrated Marketing Communications – Ensure that all aspects of the promotional mix such as advertising, sales promotion, public relations, and direct marketing work together as a unified force, rather than allowing each to work in isolation
    21. 21. III. Marketing Strategy Concepts to remember when developing promotional strategies: • Customer Relationship Marketing Involves developing and maintaining long-term relationships with customers so that they will keep coming back to make repeat purchases. Small companies have an advantage over their larger rivals at relationship marketing. Requires a company to make customer service an all-encompassing part of its culture.
    22. 22. III. Marketing Strategy Concepts to remember when developing promotional strategies: • Developing a Competitive Edge  Focus on the customer  Devotion to quality  Attention to convenience  Concentration on innovation  Dedication to service and customer satisfaction  Emphasis on speed
    23. 23. III. Marketing StrategyWhy develop a customer centric approach to business? • 67% of customers who stop patronizing a business do so because an indifferent employee treated them poorly. • 96% of dissatisfied customers never complain about rude or discourteous service to the company, but... • 91% will not buy from that business again. • Treating customers indifferently or poorly costs the average company 15% to 30% of gross sales! • 100% will tell their “horror stories” to at least nine other people. • 13% of those unhappy customers will tell their stories to at least 20 other people.
    24. 24. III. Marketing Strategy• Customer retention: Companies that are successful at retaining their customers constantly ask themselves (and their customers) these four questions: 1. What are we doing right? 2. How can we do that even better? 3. What have we done wrong? 4. What can we do in the future?
    25. 25. III. Marketing Strategy Marketing Mix – The 4P’s continued Place/Distribution • Location, location, location (accessibility, foot traffic, importance to customer, proximity to competition, parking, size, image) • Types of channels used o Direct (retail store, sales force, internet etc.) o Indirect (retailers, wholesalers, agents etc.) o Combination • Distribution costs (e.g. shipping, transportation, distributorship fee) • Sales Strategy (e.g. sales approach, based on geography) • Production & inventory capacities • Cyclical fluctuations or seasonal demands
    26. 26. IV. FinancialsBreak-even Analysis • Break-even Point is the level of sales in which a business’ revenue equals its expenses • Break-even Formula = Total Fixed Costs for a Single Selling Price per unit – Variable Cost per unit Product • Break-even Formula = Total Fixed Costs for Services or 1– (Total Variable Costs/Projected Sales) Multiple Products Important Definitions: Fixed Costs – Costs that remain the same regardless of sales volume e.g. rent, insurance, advertising etc.) Variable Costs – Costs that are directly related to sales (e.g. sales commissions, inventory costs, direct labor etc.)
    27. 27. IV. FinancialsSales Forecast • List assumptions/sales logic (e.g. seasonality, growth, increased capacity) • Estimated sales per product/service offering • Estimated sales per market segment Sigmund’s Gourmet Pasta Sales Forecast Example 2012 2013 2014 Sales Individuals $103,710 $262,527 $327,424 Families $150,304 $380,474 $474,528 Total Sales $254,014 $643,001 $801,952 Direct Cost of 2001 2002 2003 Sales Individuals $46,669 $118,137 $147,341 Families $67,637 $171,213 $213,538 Subtotal Direct $114,306 $289,350 $360,879 Cost of Sales
    28. 28. IV. Financials Marketing Expense Forecast • List assumptions/expense logic (e.g. outdoor ads during summer, sales promotions during slower months, advertising vehicle proportion) • Estimated marketing expense per product/service offering • Estimated marketing expense per market segmentSigmund’s Gourmet Pasta Marketing Expense Forecast Example Marketing Expense Budget 2012 2013 2014 Direct mail $5,267 $5,605 $5,421 Banner ads $11,704 $12,455 $12,047 Other $7,022 $7,473 $7,228 ------------ ------------ ------------ Total Sales and Marketing $23,993 $25,533 $24,696 Expenses Percent of Sales 9.45% 3.97% 3.08%
    29. 29. V. Controls Implementation MilestonesPromotional Objective Vehicle Target Budget Timeline Expected Executor MeasurementMix Market RevenueAdvertising Increase Washingtonian *Segment $5,000 1/1/2011 – $10,000 William Customer brand Magazine I 1/3/2011 Carter surveys, % of awareness expected readershipSales Increase Coupons *Segment $3,000 5/1/2011 – $5,000 Debbie CouponsPromotion product II 6/1/2011 Allen redeemed trialPersonal Increase Sales team *Segment $100, 8/1/2011 – $300, Richard Sales closesSelling product III 000 12/1/2011 000 Clark trialDirect Encourage E-mail *Segment $2,000 2/1/2011 – $20,000 Lucy E-mail clickMarketing purchase/ campaign I II 4/30/2011 Smiles through rate repurchase
    30. 30. V. ControlsMarketing Organization •Describe primary marketing roles and qualifications & background of individuals in these roles •OutsourcingContingency Planning •Increase/decrease in demand •Customer price sensitivity •Channel issues (e.g. with manufacturers, suppliers, distributors, retailers) •Competitive retaliation (price wars, product imitation) •Diminished return on marketing investment •Location challenges (construction, new residents etc.) •Product quality/recall
    31. 31. Thank You!Please Contact the DC SBDC for Consulting: DC Small Business Development Center GADGET Center, Howard University 2801 Georgia Ave., NW Washington, DC 20001 Office: 202.319.1393 Twitter: @dcsbdc Facebook: dcsbdc

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